Suit papers say Cytonn had told the three that they would receive handsome monthly returns if they invested substantial amounts of money.
Image: FILE
Three investors have sued Cytonn Investment, seeking a refund of Sh46.7 million that they had invested in the company.
Charles Nzioki Kanyaa, Harrison Kaloki Kanyaa and Robert Munyao Kanyaa sued Cytonn Real Estate Project Notes, Cytonn High Yield Solutions and Cytonn Investments Management PLC.
Suit papers say Cytonn had told the three that they would receive handsome monthly returns if they invested substantial amounts of money.
The court heard that Cytonnn painted a picture of its financial stability and promised it could be trusted with huge sums of money by investors.
The three invested Sh30 million with Cytonn in October 2018.
And once the initial investment matured, the three invested a total sum of Sh42 million at an agreed interest rate of 20 per cent per annum, payable quarterly for two years.
Cytonn routinely paid the agreed monthly interest rate until June 2020 when it stopped in breach of the agreement.
The company wrote to the investors seeking to unilaterally vary the contractual investment terms.
The three complained, saying one party cannot unilaterally vary the terms of the investment agreement. They wrote to Cytonn through their advocates.
In its letter, the trio sought a refund of the principal amount plus accrued interest as at December 31 last year. The amount sought was Sh46.7 million.
Cytonn wrote back on January 29, citing temporary illiquidity of the fund and for the very first time in their contractual relationship cited partnership agreement as the governing document of the fund.
The three say the partnership document was never given to them and that amounts to improper trade practices.
The three claim the information Cytonn gave them in terms of getting good returns was misleading and contrary to the Consumer Protection Act.
The trio said it conducted research and established that Cytonn had liquidity challenges long before the onset of Covid-19 in or about March 2020.
They want the court to issue a declaration that Cytonn violated their consumer rights.
Also sought is an order compelling Cytonn to pay Sh46.7 million as the principal amount invested.
Edited by P.O